Fiserv to sell an IT business, Costa Rica operations amid reports of repeated layoffs – Milwaukee Business Journal – The Business Journals

Brookfield-based financial technology firm Fiserv Inc. has entered into a definitive agreement to sell its Systems Integration Services (SIS) business and its Costa Rica operations to Infinite Computer Solutions Limited, a global technology solutions provider based in Rockville, Maryland.
“As part of evaluating our business portfolio, Fiserv determined that Infinite is well-suited to lead these businesses into the future,” Fiserv vice president of external communications Ann Cave said Tuesday in an emailed statement.
The deal, which was first reported by the industry publication Payments Dive, comes as Fiserv (Nasdaq: FISV) “has conducted repeated layoffs,” according to ICI Consulting, a financial institution vendor consultancy in St. Petersburg, Florida. The firm is hosting webinars for its clients this week titled “Fiserv and FIS Reorganizations.”
As part of the deal with Infinite Computer Solutions, “Fiserv entered into a multi-year agreement with Infinite for Costa Rica operations to continue providing various product delivery, professional and technology services across multiple Fiserv business lines,” Cave said.
The SIS business provides information technology services related to digital transformation including systems integration, cloud and infrastructure, cybersecurity and intelligent automation.
Fiserv declined to share the number of employees impacted by the SIS divesture but Cave acknowledged recent layoffs in a Tuesday statement to the Milwaukee Business Journal.
“We have recently made staffing adjustments that impact a small percentage of our global workforce,” Cave said. “Associates who are impacted have the opportunity to apply for other roles, as well as have access to outplacement services and enhanced severance.”
Cave also declined to share an updated figure for the company’s total employee count but said it has “more than 700 associates in the Milwaukee area.”
At the end of 2021, Fiserv had 44,000 global employees with about 26,000 in the U.S., according to its annual report published in February. Payments Dive reported that Fiserv has 500 employees in Costa Rica.
Fiserv is scheduled to report its third-quarter earnings Thursday. Among other things, analysts will be watching the company’s margins, said Baird senior research analyst David Koning, who covers Fiserv and other public financial technology and payments companies including Fiserv competitor FIS, which is also a major Milwaukee-area employer and recently announced a new CEO.
“Probably the thing that investors are most worried about is margins,” Koning said.
Fiserv reported lower adjusted operating margins in the second quarter compared with the second quarter of 2021 and lowered its outlook for margin growth due to inflation and investments in the business, Fiserv executives said during the company’s July earnings call. They said they expected margins to improve in the third and particularly the fourth quarter of 2022.
Koning noted that some layoffs could help boost the company’s margins and said he wouldn’t be “overly concerned” about modest levels of layoffs.
Koning also said Fiserv “has a lot of things going well,” noting that Fiserv is gaining market share with its small business payment processing platform Clover and appears poised to gain market share in the core processing business with its acquisition of core banking company Finxact earlier this year.
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